Bulgarian FinMin Mulls Regionally Differentiated Wages

Bulgaria's Deputy Prime Minister and Finance Minister, Simeon Djankov, does not see any connection between minimum wage and unemployment. Photo by BGNES

Bulgaria's Deputy Prime Minister and Finance Minister, Simeon Djankov, is going to propose the introduction of a differentiatedminimum wage, according to the region where workers live.

Speaking in an interview for Standard daily, Djankov says he would submit the proposal next week at the meeting of the Three-Way Council between the Cabinet, the business, and the labor unions.

According to him, a minimum monthly wage in the amount of BGN 310 is the best on the backdrop of the current state of the country's economy. He further notes that in biggest and more prospering cities like Sofia, Plovdiv, Varna, and Burgas, no one actually would accept and does work for such money, while in northwestern Bulgaria a large number of employees do.

The Finance Minister stresses the issue is how raising the minimum wage will affect local business.

He points out that at the said meeting of the Three-Way Council a formula could be established for salaries in regions with lower unemployment rate and those with a higher one, respectively having lower wages in the latter.

His institution has already conducted an analysis, showing that the above would not affect employment in any sector of the economy.

"When I took office, similarly to business people, I thought that increasing minimum wages would increase unemployment, but then I realized that this is not true because wages in Bulgaria are much lower compared to other EU Member States and we have a number of examples of unfair play by the business where benefits are paid on such low, fictional levels that they do not affect the real salary the worker receives. Now I believe a higher minimum wage is not a problem for the majority of the business, but it simply reveals the real amount of income. There is no connection between minimum wage and unemployment," Djankov concludes.